What Is Cryptocurrency Mining (Mining)?
Cryptocurrency mining, by its most basic definition, is that devices with special software and hardware approve cryptocurrency transfer transactions by solving complex problems and, as a result, are rewarded with newly produced cryptocurrency. In theory, anyone who has a computer and the internet is capable of mining.
Transfers between wallets are transferred to a transaction pool (mempool) before being approved in most blockchains Dec. A block is then created by combining these operations.Dec. These blocks are written to the blockchain after they are verified and approved by network-connected devices.
Cryptocurrency miners verify, approve and store a copy of the blockchain.
How Is Cryptocurrency Mining Done?
There are many methods of cryptocurrency mining today. It is possible to separate these methods in terms of profitability, cost and difficulty.
ASIC, i.e. Application-Specific Integrated Circuits, are cryptocurrency mining-oriented systems. The software and special hardware inside them make these circuits special hardware for cryptocurrency mining. ASIC devices, consisting of a large number of processors, consume a lot of energy, although they have a high computational capacity. For this reason, miners mining with ASIC devices need strong electrical infrastructures to meet their electricity consumption.
Cryptocurrencies based on proof of Work mining, such as Bitcoin, Litecoin, can now only be produced with ASIC mining devices due to the need for high computing capacity.
The processors of computer graphics cards are called graphics processing units (GPUs). GPU mining is also a type of mining in which processes are verified by calculating the processors of video cards. The processors of graphics cards are much more powerful and computation-oriented than the processors of computers. For this reason, graphics cards are used to validate the transactions of proof-of-work mining-based cryptocurrencies such as Ethereum, Zcash.
Graphics cards are also very affordable compared to ASIC devices. However, miners use devices that are formed by combining multiple video cards together, called "Rig", by combining multiple video decks together decks.
It is also possible to mine with the CPU, i.e. the central processing unit (processor). CPU mining can be easily done by installing mining software on computers used in homes.
But today, this method is almost never used due to its very low performance compared to other methods. For the vast majority of popular cryptocurrencies, mining with processors has become impossible.
Computer processors are now used in Proof of Stake - PoS mining instead of being used in proof-of-work mining. In this type of mining, it is enough that the mining software is running and has enough cryptocurrencies to generate revenue in the wallet, as there is no need for high computational power.
Cloud mining is an alternative mining service for those who want to mine cryptocurrencies but don't have enough hardware, time, knowledge or capital.
Users who want to mine can rent processing power from cloud mining services and mine cryptocurrencies by redirecting that processing power to the mining pool they want.
Cloud mining services lease processing power for different types of cryptocurrency mining with periodic contracts. It offers various contracts with users taking into account different costs such as hardware, software, cooling, maintenance, software. Mining revenues are higher, although contracts charged for operating costs seem more expensive. In contract packages, where lower wages and some of the operating costs are covered by mining revenues, mining revenues are further reduced.
Although it seems lower cost than other types of mining, it becomes more difficult for users who prefer cloud mining to make a profit every day.
How Much Does Cryptocurrency Mining Earn?
It depends on the type of mining you choose, the cryptocurrency unit and prices, but it takes time to make a profit from cryptocurrency mining. It is necessary to buy hardware and wait for it to pay off its cost or pay for the fees paid for cloud mining. Although revenue increases as processor power increases, electricity consumption increases, making it difficult to run more devices together and Decolonize these devices. As the number of devices increases, the time spent operating, controlling and maintaining the devices also increases.
In order to profit from cryptocurrency mining, it is necessary to have sufficient equipment and infrastructure, space to accommodate and cool the devices, and technical knowledge to operate the devices. Especially when mining proof of work, it is important to note that revenues will fall as the level of difficulty increases. To maintain revenue in proof-of-work mining, it is necessary to regularly invest in hardware, revamp devices whose performance is declining.
High hardware costs and electricity consumption decontaminate evidence mining instead of proof of work is becoming increasingly common among users.